The memory cards representing the cryptocurrency Bitcoin and the Ethereum network, with their native ether token, are submerged in water in this illustration made on May 17, 2022. REUTERS / Dado Ruvic / Illustration
Register now for FREE and unlimited access to Reuters.com
Sign up
LONDON, July 1 (Reuters – Cryptocurrency companies will need a license and guarantees for customers to issue and sell digital tokens in the European Union under the new innovative rules agreed by the bloc to domesticate a volatile “wild west” market.
Globally, cryptographic assets are largely unregulated, with EU national operators only required to show controls to combat money laundering.
Representatives of the European Parliament and EU states approved an agreement on Thursday afternoon on its Cryptocurrency Markets Act (MiCA).
Register now for FREE and unlimited access to Reuters.com
Sign up
“Today we put order in the wild west of cryptographic assets and set clear rules for a harmonized market,” said Stefan Berger, a center-right lawmaker who led the negotiations on behalf of parliament.
“The recent fall in the value of digital currencies shows us how risky and speculative they are and that it is critical to act,” Berger said.
Cryptography markets have fallen this year, pressured by the collapse of the stable currency terraUSD and the large US cryptocurrency provider, Celsius Network, freezing withdrawals and transfers. Read more
Bitcoin, the biggest witness, has fallen 70% since its November record of $ 69,000, dragging the global market.
CONSUMER PROTECTION
The historic regulation confirms the role of the EU as a regulator for digital issues, EU states said.
“With the new rules, crypto asset service providers will have to meet strict requirements to protect consumers’ portfolios and become responsible in case they lose investors ’cryptocurrencies,” they added.
The agreement will need a formal seal from the European Parliament and EU states to become law, followed by a period of application.
The new law offers issuers of cryptographic assets and related service providers a “passport” to serve customers across the EU from a single base.
Holders of stable currencies, a type of cryptocurrency designed to maintain a stable value, will be offered a claim at any time and free of charge by the issuer, with all stable currencies supervised by the bank’s banking control body. , EBA.
Robert Kopitsch, general secretary of the Blockchain lobby group for Europe that includes major Binance and Crypto.com exchanges, said the rules were “a mixed bag.”
“Thanks to last-minute changes, we also fear that stable currencies basically have no way of being profitable,” Kopitsch said.
AFME, a body in the financial markets industry, said the rules would provide certainty, reduce fragmentation and support the development of a robust and well-functioning market.
However, more clarity is needed to ensure that custodians of cryptographic assets are only pending in cases of negligence or misconduct, and not for events beyond the control of a custodian, such as a hacking of a national state, dir AFME.
NFT COMMITMENT
Many states, such as Ireland, Lithuania, and Greece, have long been opposed to including non-expendable tokens (NFTs), which are digital assets that represent objects from art to videos.
But under pressure from EU lawmakers, the compromise reached Thursday night predicts that “NFTs will be excluded from the scope unless they fall within existing cryptocurrency categories.”
Brussels will assess within 18 months whether autonomous rules are needed for NFTs.
National regulators will be responsible for licensing cryptographic companies, but will need to keep the EU securities control body, ESMA, informed about large operators.
ESMA will develop standards for cryptographic companies to reveal information about their environmental and climate footprint.
The United States and Britain, two major cryptographic centers, have not yet approved similar standards. Read more
The company behind the main stable currency USD Coin said the rules are “a significant milestone”.
“While no complete set of rules is perfect … however, it offers practical solutions to problems that other jurisdictions are beginning to address,” the American company Circle said in a blog post.
Register now for FREE and unlimited access to Reuters.com
Sign up
Additional report by Tom Wilson in London and Francesco Guarascio in Brussels Edited by Mark Potter, Jonathan Oatis and Gareth Jones
Our standards: the principles of trust of Thomson Reuters.